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Conditional discharge granted requiring $100,000 payment due to tax debt and unjustifiable extravagance.
The bankrupt, a 72-year-old self-employed businessman with significant tax debts, applied for a discharge from bankruptcy.
The discharge was opposed by the Canada Revenue Agency and the Trustee in Bankruptcy.
The court found that the bankrupt had engaged in unjustifiable extravagance and had structured his affairs through a family trust to artificially lower his income.
The court granted a conditional discharge, requiring the bankrupt to pay $100,000 to the Trustee for the benefit of his creditors.
Court refused trustee’s interim fee approval without notice to creditors.
A proposal trustee brought a motion without notice seeking approval of interim professional fees and disbursements incurred during the period following the filing of a Notice of Intention to Make a Proposal under the Bankruptcy and Insolvency Act.
The trustee relied on provisions of the BIA and Directive 27R to justify payment before a proposal was filed and without notifying creditors.
The court held that the statutory provisions relied upon did not authorize such payment where no proposal had yet been filed and the trustee was not carrying on the debtor’s business.
The court emphasized that creditors, particularly secured creditors, may wish to oppose the request.
The motion was refused, with leave to bring the request again on notice to creditors.
